China Modern Announced Net Income of $5.0 Million and EPS of $0.09 for the First Quarter of Fiscal Year 2013

HARBIN, CHINA--(Marketwire - Nov 15, 2012) - China Modern Agricultural Information Inc. ("the Company") (OTCQB: CMCI), a high-tech livestock company specializing in the breeding of cows and calves, the production and sale of milk and the sale of organic fertilizer, today announced net income of $5.0 million based on the 53.1 million shares of fully diluted outstanding shares or EPS of $0.09 for the first quarter of fiscal year 2013 as of September 30, 2012.

Financial Highlights for the First Quarter of Fiscal Year 2013

2013 Fiscal First Quarter (USD) (unaudited)

Three Months End Sep. 30, 2012

2012

2011

CHANGE

Revenue

$

10.9 million

$

4.9 million

119

%

Gross Profit

$

7.0 million

$

3.4 million

108

%

Gross Profit Margin

64

%

67

%

-4.4

%

Net Income

$

5.0 million

$

2.6 million

92

%

Basic and diluted EPS*

$

0.09

$

0.06

50

%

* Based on 53 million and 41 million shares outstanding for 2013 and 2012 fiscal first quarter, respectively.

Revenue for the three months ended September 30, 2012 totaled $10.9 million, an increase of 119% as compared to $4.9 million for the same period in 2011. The revenue is generated predominately from the sale of natural milk and natural milk sales commissions from farmers. Sales revenue from natural milk was $7.67 million, an increase of $4 million or 109%, as compared to $3.67 million for the three months ended September 30, 2011. There were two main reasons for the increase in revenue. First, as Yulong Cattle was acquired on November 23, 2011, since results were not included in the consolidated financial statements for the three months ended September 30, 2011. Second, the milk sales price has increased significantly compared with the same period last year. The sales commissions from farmers were $3.25 million, an increase of 149% as compared to $1.3 million for the same period last year.

Gross profit for the three months ended September 30, 2012 was $7.0 million, an increase of 108% as compared to $3.4 million for the same period last year. Gross profit margin decreased to 64% from 67%, primarily due to the acquisition of Yulong Cattle since its financials were not included in the financial statements for the same period last year.

Operating expenses increased to $289,430 for the three months ended September 30, 2012 from $137,608 for the three months ended September 30, 2011, an increase of $151,822 or 110%. The main reason for this increase is due to a new revenue stream that was introduced. We incurred $162,528 and $65,190 in business taxes for the three months ended September 30, 2012 and 2011, respectively. We classified it as a selling expense which is included in operating expenses. In addition, the operating expenses of Yulong Cattle were consolidated in the financial statements for the three months ended September 30, 2012.

Net income attributable to the common stockholders of the Company was $5.0 million, representing $0.09 per share, and $2.6 million, representing $0.06 per share for the three months ended September 30, 2012 and 2011, respectively. The net income and EPS increased by 92% and 50% YOY respectively.

Cautionary Statement Regarding Forward Looking InformationCertain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our 8K/A dated March 31, 2011, and other recent filings. These filings are available at http://www.sec.gov/.